references & referrals - gsa & referrals •pricing desk guide – access at: •contacts: -...
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References & Referrals
• Pricing Desk Guide – Access at:
www.gsa.gov/rentpricingpolicy
• Contacts:
- Regional Account Manager
- Regional Specialist or LCO handling the
space acquisition
2 GSA Public Buildings Service
Can’t talk about tenant
improvements without first
talking about the shell
definition.
3 GSA Public Buildings Service
What about Building Shell?
• The shell and TI distinction is an impermeable barrier or
“firewall” across which funding cannot shift.
• PBS must use the shell definition in its entirety without
deviation.
• Building standards and design guides are not part of the
building shell merely because they are called “standards.”
• Tenant agency driven upgrades to building shell are
considered TIs and are separately priced.
PDG Sections 2.4.1 & 3.5.1 4 GSA Public Buildings Service
Building Shell Definition
• The complete enveloping structure, the base building systems,
and the finished common areas of a building that adjoin the
tenant areas.
• Shell in Base Building Includes
– Base structure and building enclosure (e.g., windows)
– Base building electrical & mechanical systems
– Common areas (e.g., lobbies, elevators, restrooms, garages)
• Shell in Tenant Areas Includes
– Wall board on exterior perimeter & interior core walls
– Common corridor stud walls without gypsum board
– Suspended acoustical tile ceiling with parabolic fluorescent
lighting (open office layout)
– Concrete floor
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PDG Sections 2.4.1 and 3.5.1
Building Shell
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Suspended ceiling with
fluorescent light fixtures
Primed gypsum wall board
on exterior perimeter walls
& core elements
Electrical service to floor
for general office space
HVAC distribution for general
office space
Level Concrete Floor
PDG Sections 2.4.1 and 3.5.1
Tenant Improvements
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Tenant Improvements
• The finishes and fixtures tenant agency elects
that typically take space from the shell condition
to a finished, usable condition; compliant with all
applicable building codes and standards
• The existence of building standards does not
mean they are part of shell – they are still TIs
(e.g. suite entry door specification, restricted
color palettes)
8 GSA Public Buildings Service
PDG Sections 2.5.1 and 3.6.1
Typical Tenant Improvements
• Electrical wiring, outlets, and horizontal conduit, including cable trays
and hooks, within the tenant agency’s demised premises and to the
building core
• Carpeting or other floor covering; raised access flooring
• Plumbing fixtures within the demised premises and all lines connecting
to the building core – except for common bathrooms
• Partitioning and wall finishes
• Doors (including suite entry), sidelights, frames, and hardware
• Millwork
• Thermostats
• Window treatments
– Refer to PDG for Comprehensive List
9 GSA Public Buildings Service
PDG Sections 2.5.2 and 3.6.2
Shell Upgrades (Priced as TIs)
• Examples:
- Separate HVAC for ADP or computer
room environmental control
- Upgraded ceiling tile
- Specialty lighting
- Structural enhancements to support
unconventional floor loads
- Private elevators or restrooms
10 GSA Public Buildings Service
Shell vs. TI Example
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Building Signage
Wood
(Common Area)
Legend
Shell
Tenant Improvement Terrazzo Tile
(Common Area)
Terrazzo Tile
(Tenant Space)
Wood Wall &
Stainless
Steel Logo
Suite Entry Door
Glass Wall with Leaf Graphic
(Common Area)
Tenant Improvement Allowance
12 GSA Public Buildings Service
Application of TI Allowances
• Funding source that enables the space to be
built out
• Rent payment is lower if an amount less than
the allowance limit is used
• If the full allowance is not used for initial
build-out, it is no longer available
• Can only be used to pay for items that are
real property, or which become real property
when attached or affixed to the building
13 GSA Public Buildings Service
PDG Sections 2.5.9 and 3.6.9
TI Cannot Fund Personal Property
Examples Include:
• Furniture
• Microwaves
• Refrigerators
• Artwork
• Personal computers
• Audiovisual equipment
• Televisions for conference rooms
• Phone handsets
• Physical relocation expenses of personal property
14 GSA Public Buildings Service
PDG Sections 2.5.9 and 3.6.9
Application of TI Allowance
• Initial occupancies (including expansions)
– New space, new tenant
– Tenant agency provided the full TI allowance
– Tenant agency cannot buy down the general allowance
in first generation space through use of an RWA
• Backfill occupancies
– 2nd generation space, new tenant
– The full TI allowance may be provided to tenant
agency, subject to availability of funds
15 GSA Public Buildings Service
PDG Sections 2.5.3 and 3.6.3
Application of TI Allowance
• Mid-occupancy / post initial occupancy
– Same OA term, same space
– TIs typically funded by the tenant agency
– No obligation to provide TI allowance
– Subject to availability of funds, full or partial TI allowance may be provided to tenant agency
• Continuing occupancies
– New OA term, same space, same tenant
– TI allowance requested typically just minor alterations or carpet and paint
– Leased Space
• Tenant agency provided the full TI allowance
– Federally Owned Space
• Tenant agency provided the full or partial TI allowance, subject to availability of funds
16 GSA Public Buildings Service
PDG Sections 2.5.3 and 3.6.3
General TI Allowance
• Takes the space from shell to “vanilla” office space
• Set nationally and indexed to local construction costs
– Currently $38.95 per USF (Washington, D.C.)
• Covers cost of “typical” office finishes
– Doors/Partitioning
– Carpeting
– Electric & telephone outlets
17 GSA Public Buildings Service
PDG Sections 2.5.4 and 3.6.4
Customization TI Allowance
• Takes the space from “vanilla” office space to space
specifically designed to function for a particular tenant
agency’s mission
• Examples include
• custom cabinetry or millwork
• laboratory countertops and fume hoods
• private restrooms
• raised access flooring
• upgraded ventilation for high occupancy uses
• slab-to-slab walls
18 GSA Public Buildings Service
PDG Sections 2.5.5 and 3.6.5
TI Allowances for Warehouses
• The TI allowance reduced to 20% of the
general allowance as adjusted for locality
• If the TI allowance is to be used to
construct offices or other habitable or
conditioned spaces within a warehouse
building, then the TI allowance is to be
used to construct all the shell and TIs
necessary for that office or other use
19 GSA Public Buildings Service
PDG Sections 2.5.13 and 3.6.13
TI Allowance by Tier
20 GSA Public Buildings Service
• PBS created a series of
customization tiers
– tier 0 to tier 6
• Each tier is equal to
10% of the value of the
general allowance
• Each tenant agency
and bureau is assigned
a tier
$38.95 per USF
x Local Construction Index
= General Allowance
General Allowance
x 10% for each Tier
= Custom Allowance
General Allowance
+ Custom Allowance
= Total Allowance
PDG Sections 2.5.5., 2.5.6 and 3.6.5, 3.6.6
TI Allowance by Functional Estimate
• The TI allowance is set in accordance with the benchmarks
or cost estimates
• Must cover the cost of basic functionality that meets the
tenant agency’s operational requirements for its specific
space use
– PBS is not obligated to ensure that all aspects of a tenant
agency’s design guidelines are incorporated into the TI
allowance
– Not intended to cover the total cost of TIs or eliminate
lump sum funding, the standard is functionality vs. finish,
fixture and feature enhancement
• Space must be finished, functional, and compliant with all
applicable building codes
21 GSA Public Buildings Service PDG Sections 2.5.7 and 3.6.7
TI Allowance Amortization-Leases
• Amortization term usually the firm term of the lease
• Two rules for limiting amortization terms for TIs:
– The amortization term must not exceed the economic life of
the improvements
– The amortization term must not exceed the term of the OA
• Exception: Lessors, with PBS and tenant agency
agreement, can set amortization term beyond the lease
firm term provided no lump-sum costs due if PBS
exercises termination rights or leaves at the end of the
lease term
• Multiple amortization periods can be done for special cases such
as phased projects
• Interest rate negotiated between the successful offeror and PBS
22 GSA Public Buildings Service
PDG Section 2.5.8
TI Allowance Amortization-Owned
• Standard amortization term is 10 years
• Two rules for limiting amortization terms for TIs:
– The amortization term must not exceed the economic life of the improvements
– The amortization term must not exceed the term of the OA
• Multiple amortization periods can be done for special cases such as phased projects
• Interest rate set annually, 10 year Treasury plus 12.5 basis points
23 GSA Public Buildings Service
PDG Section 3.6.8
Lump-Sum Payment Options for TI
24 GSA Public Buildings Service
Timing of Lump-
Sum Payment Requirement Payment Method
At assignment
inception
PBS allows the tenant
agency to use lump-sum
payments to lower the TI
and/or to cover TI costs
above the TI allowance
Above the TI allowance – RWA
For relet space, any part of the
allowance – RWA (see section
2.5.10.B for additional detail on
relet space)
At the time a tenant
agency exercises its
right to release
space back to PBS
PBS requires a lump-sum
amount equal to the
outstanding balance on the
TIs that PBS has been
amortizing in the Rent
Rent through OA Tool
PDG Sections 2.5.10 and 3.6.10
Lump-Sum Payment Options for TI
25 GSA Public Buildings Service
Timing of Lump-
Sum Payment Requirement Payment Method
At any time during
the OA term in
which the tenant
agency wants
reimbursable space
changes
PBS requires tenant
agencies to fund, in full and
in advance, the cost of space
changes to an existing
assignment
RWA
When an expanding
tenant agency
displaces another
tenant agency
PBS requires the forcing
tenant agency to pay PBS for
the unamortized balance of
the TIs of the displaced
tenant agency
Rent through OA Tool
PDG Sections 2.5.10 and 3.6.10
Building Specific Amortized Capital
(BSAC)
26 GSA Public Buildings Service
BSAC
• Security items that are a separate capital
investment in the property
– recommended by FPS under ISC
- doesn’t include tenant specific security
which is a TI
• Not included in the building shell or TI
• Separately charged to agency on rent bill
PDG Section 2.9.2 and 3.10.2 27 GSA Public Buildings Service
Some BSAC Examples
• Progressive collapse avoidance
• Window glazing
• Blast resistant windows
• Vehicular barriers (e.g., bollards, pop up &
arm gates)
• Parking lot fencing
• Card readers that serve solely as a locking
mechanism at the building entrance
28 GSA Public Buildings Service
BSAC in the Rents
• For federally owned buildings, amortized
at federal TI rate into the building rents for
totals exceeding $50,000; then prorated to
each occupying tenant on their rent bill.
• For leases, amortized over lease firm term
at usually the same rate as the TIs
(subject to OMB A-11 restrictions).
29 GSA Public Buildings Service
Application of OMB Circular A-11
• Contains the rules/processes for space as it relates to features
and enhancements built for the government’s unique needs or
special purposes
• Indicates that security related build out unique to the tenant and
also that BSAC may be financed through the rents provided
- in the case of leases, their inclusion does not push
the total fully serviced rent over the OMB approved
rental rate and remains under the high end of the
fully serviced market rents.
- in federally owned buildings, the rent limitation does not
apply; requires only that the improvements be within the
functional standard for the tenant agency.
30 GSA Public Buildings Service PDG Sections 2.5.11 and 3.6.11
Questions?
31 GSA Public Buildings Service